Yesterday, Saab looked potentially through the worst of its troubles, with a new wave of funding—enough to give the struggling automaker a comfort zone—waiting in the wings.
But a day later, Saab Automobile looks like it could possibly go the way of the Hummer. Last year, a deal with China's Sichuan Tengzhong Heavy Industrial Machines fell through due to lack of government approval—potentially, depending on the source, the same issue in the Saab deal.
The deal, which would have supplied roughly $215 million dollars to Saab, would have given China's Hawtai Motor Group a nearly 30-percent share in Saab (which is currently owned by Spyker Cars). In an immediate sense it would have provided the Swedish automaker with the funds to pay off its suppliers, ink new supply deals, and restart production in Sweden; over the longer term it would have also allowed the funds to finalize production details for its 9-3 Griffin model and, potentially, as we reported earlier this week, allowed Saab to tap into Hawtai's rapidly expanding powertrain production capacity—especially in the area of clean diesels.
Although Saab officials had told us that there were no actual plans to distribute Hawtai products in the U.S., some outlets reported otherwise—that there had been talk about the deal potentially opening some regulatory doors for the long-anticipated hurdle of Chinese-assembled vehicles coming to America.
As Spyker Cars CEO Victor Muller outlined earlier this week, the $28-million shortfall (mainly with suppliers) earlier in the year that stopped production at Saab's Trollhattan plant has at this time become about $128 million to restart operations. A separate $43 million loan arranged by Saab prior to the potential Chinese deal won't be enough to allow the automaker to survive, but it could be stacked with other new funding.
Muller had cited the process of extricating Saab from GM as one of the root causes of the brand's financial difficulties, more so than its sales, which have been down to a trickle.
At this point, the most likely solution is to get Russian investor Vladimir Antonov to reinvest.
China isn't ruled out either; just after news had hit about the no-deal on Thursday, a source told Reuters that China's Great Wall Motor was in talks with Saab owner Spyker Cars.
A Saab source told us earlier this week that Spyker had about a dozen other possibilities for Saab funding, but none of them either allowed such a combination of a continued product plan, operational independence, and international supply-chain possibilities that the Hawtai deal would have.
Bankruptcy looms unless Victor Muller can talk his way into the funds—soon, as the oppressively large bill to press restart continues to mount.